How to fix: Customer with negative Open Balance

michele49 · ‎November 07, 2021

Re: QuickBooks Online Sales

** Update ** when I logged in this morning, the Open Balance was $0.00 -- no idea why, but glad it is resolved.

In Sales > Customers > (Customer Name), I have a Customer that has a negative number at the top of the page (-$142.50 OPEN). The Customer has paid every invoice, it seems this number should be zero.

-$142.50 OPEN

$0.00 OVERDUE

Below that area, I can see a list of transactions, with each invoice showing a corresponding payment. The customer's balance should be zero ... how do I fix the incorrect balance?

Charies_M · ‎November 07, 2021

I appreciate you for getting back with additional information, michele49.

A negative customer balance can be resolved by applying credit memos to offset the entry. In your case, we can create a journal entry. This allows you to move money between accounts and force your books to balance in specific ways. However, I'd still suggest consulting an accountant first to make sure correct accounts are used.

To create a journal, you can follow these steps:

Select + New.
Click Journal entry.
On the first line, select an account from the Account field.
On the next line, select the other account you're moving money to or from.
Check the amounts - you should have the same amount in the Credit column on one line and the Debit column on the other. This means the accounts are in balance.
Enter information in the memo section so you know why you made the journal entry.
Choose Save and new or Save and close.

To learn more about Journal entry click on this article: Create a journal entry in QuickBooks Online.

In case you want to review the entries made, you can pull up or print a report for Journal.

To do that:

Go to Reports.
Search for the Journal report in the search bar.
Select Customize, then make the following customization

Be sure to get back to me if you have additional questions while working with customer balance. It would be my pleasure to help. Have a good one!

View solution in original post

JonpriL · ‎November 07, 2021

I'm here to help you fix this, @michele49.

When customers make a payment to an invoice you've sent to them, an overpayment may happen of the time. This is the reason why you're seeing a negative balance upon reviewing the list of their transactions.

Now to get rid of this, you'll have to create an entry that'll offset the negative balance. That's why we need to create a credit memo to fix this. Let me show you how.

Go to the +New button.
Under CUSTOMERS, select Credit Memo.
Select the name of the customer with the negative balance in question.
Under PRODUCT/SERVICE, select the item you remember listed on the invoice linked to the last payment made.
Enter the amount equal to the negative balance.
Click Save and close.

Once done, you may need to give a refund to your customer showing the overpayment they made. And this article will show you the steps on how to do so: Create and Apply Credit Memos in QuickBooks Online.

You may also read this reference that'll allow you to share a document showing all business activities made by a certain customer: Create and Send Customer Statements in QuickBooks Online.

If there's anything else that I can help you with aside from understanding the negative balance of your customer, please let me know the comments below. I'll be here ready to lend a helping hand. Have a good one!

michele49 · ‎November 07, 2021

Thank you for your reply. Applying a credit leads the negative balance to double, so that doesn't resolve the problem.

Here is what I have now on the Customers page:

At the top of the page: -$285.00 OPEN, $0.00 OVERDUE

11/07/2021, Balance -$142.50, Total -$142.50 (this is the new credit memo)

06/17/2021, Balance $0.00, Total -$142.50, Status Closed (client payment)

06/10/2021, Balance $0.00, Total $142.50, Status Paid (invoice)

Charies_M · ‎November 07, 2021

I appreciate you for getting back with additional information, michele49.

A negative customer balance can be resolved by applying credit memos to offset the entry. In your case, we can create a journal entry. This allows you to move money between accounts and force your books to balance in specific ways. However, I'd still suggest consulting an accountant first to make sure correct accounts are used.

To create a journal, you can follow these steps:

Select + New.
Click Journal entry.
On the first line, select an account from the Account field.
On the next line, select the other account you're moving money to or from.
Check the amounts - you should have the same amount in the Credit column on one line and the Debit column on the other. This means the accounts are in balance.
Enter information in the memo section so you know why you made the journal entry.
Choose Save and new or Save and close.

To learn more about Journal entry click on this article: Create a journal entry in QuickBooks Online.

In case you want to review the entries made, you can pull up or print a report for Journal.

To do that:

Go to Reports.
Search for the Journal report in the search bar.
Select Customize, then make the following customization

Be sure to get back to me if you have additional questions while working with customer balance. It would be my pleasure to help. Have a good one!

Topics

Training

Community

Resources

How to fix: Customer with negative Open Balance